TD Retirement Conservative Portfolio

Transcription

1 TD Retirement Conservative Portfolio (08/17) TD Mutual Funds for the period ended This Interim Management Report of Fund Performance contains financial highlights, but does not contain either the complete interim financial report or annual financial statements of the investment fund. You can get a copy of the interim financial report or annual financial statements at your request, at no cost, by calling , by writing to us at TD Asset Management Inc., P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8, by to td.mutualfunds@td.com, or by visiting our website at tdassetmanagement.com or the SEDAR website at sedar.com Securityholders may also contact us or visit our website to get a copy of the investment fund s proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure at no cost. This Interim Management Report of Fund Performance represents management s view of the significant factors and developments affecting the investment fund s performance and outlook since December 31, 2016, the investment fund s fiscal year-end, until. This report should be read in conjunction with the 2016 Annual Management Report of Fund Performance.

2 ntd Retirement Conservative Portfolio Management Discussion of Fund Performance Results of Operations The Investor Series units of the TD Retirement Conservative Portfolio ( Fund ) returned 2.0 percent for the six-month period ended ( Reporting Period ), versus 2.8 percent for the Fund s product benchmark, which is composed of 90 percent the FTSE TMX Canada Universe Bond Index, 5 percent the MSCI World Index (Net Dividend, C$) and 5 percent the S&P 500 Total Return Index (Net Dividend, C$). Returns for other series of the Fund may vary, largely due to differences in fees and expenses. Unlike the benchmark, the Fund s return is quoted after the deduction of fees and expenses. Market Update In the first quarter of 2017, the Canadian economy advanced 0.9 percent (3.7 percent annualized), as measured by gross domestic product. With the exception of imports, all major categories improved. Export activity recovered after the sharp decline in the second quarter of 2016, with energy-related exports delivering solid gains. The price of oil ended the Reporting Period at approximately US$46 per barrel. The price was down from approximately US$54 per barrel at the beginning of the Reporting Period, yet significantly higher than the approximately US$26 per barrel trough reached in early February of The Bank of Canada ( BoC ) stated that it expected growth in Canada to be moderate but remain above potential following a solid showing in the first quarter. With inflation that is well under control, the BoC maintained its overnight interest rate at 0.50 percent at its meeting on May 24, Yields on one-year and shorter bonds issued by the Government of Canada climbed during the Reporting Period in response to the U.S. Federal Reserve Board s decision to increase interest rates. At the start of the Reporting Period, long-term Government of Canada bond yields were at elevated levels in anticipation of the growth-inducing initiatives promised by U.S. President Trump. Yields were also driven higher as a result of the recovery in oil prices, which caused Canada s inflation outlook to be adjusted higher. Investment-grade credit spreads (the difference in yield between two bonds of similar maturities but different credit qualities) narrowed over the Reporting Period and corporate bonds outperformed government-related bonds. Key Contributors/Detractors During the Reporting Period, the Fund generated positive absolute returns and performed in line relative to the benchmark. The Fund s exposure to equities and fixed income contributed to performance, while holding the U.S. dollar as a cash component slightly detracted from returns due to the Canadian dollar rising relative to the U.S. dollar. Within equities, exposure to U.S equities gained through the TD Risk Reduction Pool, the TD Global Low Volatility Fund and the TD U.S. Risk Managed Equity Fund had a positive impact on performance. In particular, the TD Risk Reduction Pool component of the Fund contributed the most to the relative performance. Assets The Investor Series, F-Series and S-Series units of the Fund experienced a significant increase in assets due to investor purchase activity. Recent Developments The Portfolio Adviser continues to be mindful of a variety of macro - economic factors that may influence investments and is cognizant of the potentially problematic structural issues that remain unresolved, such as high debt levels, low productivity and an aging population. Stocks and bond yields have generally risen over the past several months, driven by signs of improvement in the global economy and by enthusiasm for some of U.S. President Trump s policies, but this optimism may be waning. On July 12, 2017, the BoC raised its benchmark overnight interest rate by 0.25 percent to 0.75 percent in response to improved economic conditions. Even though political uncertainty in Europe has declined over the past quarter, the outlook in the U.K. remains highly uncertain. As a result, the Portfolio Adviser continues to favour European stocks. Currently, the Fund maintains a preference for lower cash and fixed income holdings while favouring equity holdings. Given the current environment, the Portfolio Adviser continues to adjust the Fund to add value by trimming cash and modestly adjusting exposure to fixed income through the TD Income Opportunities Pool and the TD Canadian Core Plus Bond Fund, as well as equity exposure through the TD Global Low Volatility Fund. In terms of currency, the U.S. dollar continued to decline against a basket of currencies due to expectations of better economic data in Europe, and comments regarding interest rate increases by the major central banks around the globe. The Canadian dollar has improved relative to the U.S. dollar, and the Portfolio Adviser expects that to continue given the BoC s comments on the Canadian economy being better than anticipated. Therefore, the Portfolio Adviser has further trimmed the Fund s U.S. dollar position. 1

3 Related Party Transactions Affiliates of TD Asset Management Inc. ( TDAM ) may earn fees and spreads in connection with various services provided to, or transactions with, the Fund, such as in connection with banking, custody, brokerage and derivatives transactions. Manager, Trustee and Portfolio Adviser: TDAM, a wholly-owned subsidiary of The Toronto-Dominion Bank ( TD ), is the manager, trustee and portfolio adviser of the Fund. The Fund pays TDAM an annual management fee, which may vary for each series of Fund units, and an annual administration fee of 0.08 percent with respect to the Investor Series, Premium Series, Advisor Series, H-Series, K-Series and T-Series units of the Fund. The Fund may also hold series of units of other funds managed by TDAM for which TDAM may be paid a fee. However, there is no duplication of fees. Distributor: For certain series of units of the Fund, TD Investment Services Inc., a wholly-owned subsidiary of TD, is the principal distributor for which it is paid a trailer commission by TDAM. Units of the Fund are also distributed through brokers and dealers including TD Waterhouse Canada Inc. ( TDW ), a wholly-owned subsidiary of TD. TDW, like other dealers, is paid a trailer commission by TDAM for distributing certain series of units of the Fund. Trailer commissions are paid by TDAM out of the management fees it receives from the Fund and are based on the average value of assets held by each dealer. Registrar and Transfer Agent: TD is the registrar and transfer agent of the Fund, and as such maintains all unitholder records, processes purchase, switch, conversion and redemption orders, issues investor statements and prepares annual tax reporting information on behalf of the Fund. TD earns a foreign exchange spread when unitholders switch between units of funds denominated in different currencies. The Fund also maintains bank accounts and overdraft provisions with TD for which TD earns a fee. Buying and Selling Securities: TDAM has established an independent review committee ( IRC ) which acts as an impartial and independent committee to review and provide recommendations or, if appropriate, approvals respecting any conflict of interest matters referred to it by TDAM. The IRC prepares, at least annually, a report of its activities for securityholders of the Fund. The report is available on the TDAM website at tdassetmanagement.com or at the securityholder s request at no cost by contacting TDAM (see front cover). The Fund and/or underlying fund(s) in which the Fund invests relied on standing instructions from the IRC in respect of one or more of the following transactions: (a) trades in securities of TD or any affiliate or associate thereof; (b) investments in the securities of an issuer where TD Securities Inc., TDW, or any other affiliate of TDAM (a Related Dealer ) acted as an underwriter during the distribution of such securities and the 60-day period following the completion of the distribution of the underwritten securities; (c) purchases or sales of securities of an issuer from or to another investment fund or discretionary managed account managed by TDAM; and (d) purchases of securities from or sales of securities to a Related Dealer, where it acted as principal. The relevant standing instructions require that securities transactions with related parties conducted by TDAM (i) are free from any influence by an entity related to TDAM and without taking into account any consideration relevant to an entity related to TDAM; (ii) represent the business judgment of TDAM uninfluenced by considerations other than the best interests of the Fund and/or underlying fund(s); (iii) comply with the applicable policies and procedures of TDAM; and (iv) achieve a fair and reasonable result for the Fund and/or underlying fund(s). 2

4 Financial Highlights The following tables show selected key financial information about the Fund and are intended to help you understand the Fund s financial performance for the six-month period ended and the past five fiscal years, as applicable. Net Assets per Unit ($) 1 INVESTOR SERIES * 2012 Net Assets, Beginning of Period N/A Total Revenue N/A Total Expenses (excluding distributions) (0.14) (0.29) (0.28) (0.30) (0.09) N/A Realized Gains (Losses) for the Period N/A Unrealized Gains (Losses) for the Period (0.37) N/A Total Increase (Decrease) from Operations (0.06) N/A From Net Investment Income (excluding dividends) 4 (0.10) (0.12) (0.05) (0.08) N/A From Dividends (0.01) N/A From Capital Gains (0.13) (0.09) (0.04) N/A Return of Capital N/A Total Annual Distributions (0.10) (0.25) (0.14) (0.13) N/A Net Assets, End of Period N/A PREMIUM SERIES * 2012 Net Assets, Beginning of Period N/A Total Revenue N/A Total Expenses (excluding distributions) (0.12) (0.25) (0.25) (0.27) (0.04) N/A Realized Gains (Losses) for the Period N/A Unrealized Gains (Losses) for the Period (0.37) N/A Total Increase (Decrease) from Operations (0.04) N/A From Net Investment Income (excluding dividends) 4 (0.13) (0.13) (0.05) 0.00 N/A From Dividends (0.01) N/A From Capital Gains (0.13) (0.09) 0.00 N/A Return of Capital N/A Total Annual Distributions (0.14) (0.26) (0.14) 0.00 N/A Net Assets, End of Period N/A ADVISOR SERIES * 2012 Net Assets, Beginning of Period N/A Total Revenue N/A Total Expenses (excluding distributions) (0.14) (0.29) (0.29) (0.31) (0.09) N/A Realized Gains (Losses) for the Period N/A Unrealized Gains (Losses) for the Period (0.32) N/A Total Increase (Decrease) from Operations (0.04) N/A From Net Investment Income (excluding dividends) 4 (0.12) (0.12) (0.05) (0.02) N/A From Dividends (0.01) N/A From Capital Gains (0.15) (0.10) (0.01) N/A Return of Capital N/A Total Annual Distributions (0.13) (0.27) (0.15) (0.03) N/A Net Assets, End of Period N/A Footnotes for the above table(s) can be found at the end of the Net Assets per Unit section. 3

5 Net Assets per Unit ($) 1 (continued) F-SERIES * 2012 Net Assets, Beginning of Period N/A Total Revenue N/A Total Expenses (excluding distributions) (0.06) (0.14) (0.14) (0.17) (0.04) N/A Realized Gains (Losses) for the Period N/A Unrealized Gains (Losses) for the Period (0.40) N/A Total Increase (Decrease) from Operations N/A From Net Investment Income (excluding dividends) 4 (0.16) (0.15) (0.07) (0.03) N/A From Dividends (0.01) N/A From Capital Gains (0.13) (0.09) (0.01) N/A Return of Capital N/A Total Annual Distributions (0.17) (0.28) (0.16) (0.04) N/A Net Assets, End of Period N/A H-SERIES * 2012 Net Assets, Beginning of Period N/A Total Revenue N/A Total Expenses (excluding distributions) (0.12) (0.25) (0.26) (0.29) (0.09) N/A Realized Gains (Losses) for the Period N/A Unrealized Gains (Losses) for the Period (0.18) N/A Total Increase (Decrease) from Operations N/A From Net Investment Income (excluding dividends) (0.11) (0.11) (0.06) (0.06) N/A From Dividends (0.01) (0.01) N/A From Capital Gains 0.00 (0.17) (0.14) (0.06) N/A Return of Capital (0.65) (0.67) (0.67) (0.14) N/A Total Annual Distributions 3 (0.34) (0.77) (0.95) (0.87) (0.27) N/A Net Assets, End of Period N/A K-SERIES * Net Assets, Beginning of Period N/A N/A Total Revenue N/A N/A Total Expenses (excluding distributions) (0.11) (0.22) (0.23) (0.10) N/A N/A Realized Gains (Losses) for the Period N/A N/A Unrealized Gains (Losses) for the Period (0.39) 0.11 N/A N/A Total Increase (Decrease) from Operations (0.07) 0.35 N/A N/A From Net Investment Income (excluding dividends) (0.11) (0.12) (0.04) N/A N/A From Dividends (0.01) N/A N/A From Capital Gains 0.00 (0.15) (0.09) N/A N/A Return of Capital (0.65) (0.64) (0.16) N/A N/A Total Annual Distributions 3 (0.34) (0.77) (0.91) (0.29) N/A N/A Net Assets, End of Period N/A N/A Footnotes for the above table(s) can be found at the end of the Net Assets per Unit section. 4

6 Net Assets per Unit ($) 1 (continued) S-SERIES * 2012 Net Assets, Beginning of Period N/A Total Revenue N/A Total Expenses (excluding distributions) (0.05) (0.13) (0.13) (0.16) (0.04) N/A Realized Gains (Losses) for the Period N/A Unrealized Gains (Losses) for the Period (0.26) N/A Total Increase (Decrease) from Operations N/A From Net Investment Income (excluding dividends) (0.15) (0.17) (0.04) (0.01) N/A From Dividends N/A From Capital Gains 0.00 (0.18) (0.15) (0.02) N/A Return of Capital (0.67) (0.71) (0.60) (0.22) N/A Total Annual Distributions 3 (0.35) (0.82) (1.06) (0.79) (0.25) N/A Net Assets, End of Period N/A T-SERIES * 2012 Net Assets, Beginning of Period N/A Total Revenue N/A Total Expenses (excluding distributions) (0.12) (0.26) (0.26) (0.30) (0.09) N/A Realized Gains (Losses) for the Period N/A Unrealized Gains (Losses) for the Period (0.28) N/A Total Increase (Decrease) from Operations (0.02) N/A From Net Investment Income (excluding dividends) (0.11) (0.11) (0.05) (0.01) N/A From Dividends N/A From Capital Gains 0.00 (0.16) (0.14) (0.02) N/A Return of Capital (0.66) (0.66) (0.65) (0.22) N/A Total Annual Distributions 3 (0.35) (0.77) (0.93) (0.84) (0.25) N/A Net Assets, End of Period N/A Footnotes for the above table(s) can be found at the end of the Net Assets per Unit section. 5

7 Net Assets per Unit ($) 1 (continued) O-SERIES * Net Assets, Beginning of Period N/A N/A Total Revenue N/A N/A Total Expenses (excluding distributions) 0.00 (0.01) 0.00 (0.03) N/A N/A Realized Gains (Losses) for the Period N/A N/A Unrealized Gains (Losses) for the Period (1.22) (0.09) N/A N/A Total Increase (Decrease) from Operations (0.05) 0.04 N/A N/A From Net Investment Income (excluding dividends) 4 (0.21) (0.08) 0.00 N/A N/A From Dividends (0.01) N/A N/A From Capital Gains (0.02) 0.00 N/A N/A Return of Capital N/A N/A Total Annual Distributions (0.22) (0.10) 0.00 N/A N/A Net Assets, End of Period N/A N/A 1 This information is derived from the Fund s interim and audited annual financial statements. The Fund adopted International Financial Reporting Standards ( IFRS ) on January 1, 2014 and accordingly adjusted the immediately preceding financial year ended December 31, 2013 to reflect the amounts in accordance with IFRS. Previously, financial statements were prepared as per Canadian generally accepted accounting principles ( GAAP ) under which the Fund measured fair values of its investments based on bid prices for long positions and ask prices for short positions. As such, the net assets per unit presented in the financial statements may have differed from the net asset value ( NAV ) per unit calculated for fund pricing purposes. Under IFRS, the Fund measures fair values of its investments based on close market prices, where the close market price falls within the bid-ask spread or based on quotations from recognized dealers. As such, the Fund s accounting policies for measuring the fair value of investments in the financial statements are substantively consistent with those used in measuring the NAV for transactions with unitholders. 2 Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase (decrease) from operations are based on the weighted average number of units outstanding over the financial periods. These tables are not intended to be a reconciliation of the net assets per unit. 3 Distributions were paid in cash or reinvested in additional units of the Fund, or both. 4 On December 31, 2015, the Fund made a deemed distribution as follows: Investor Series, $0.005 of income per unit and $0.010 of capital gains per unit; Premium Series, $0.005 of income per unit and $0.011 of capital gains per unit; Advisor Series, $0.005 of income per unit and $0.011 of capital gains per unit; F-Series, $0.005 of income per unit and $0.010 of capital gains per unit; O-Series, $0.002 of income per unit and $0.002 of capital gains per unit. The units were deemed to have been issued in an amount equal in value to the deemed distribution amount and immediately consolidated. As a result, the total and per unit values of net assets and NAV remain the same before and after this deemed distribution. * Data reported represents results from the commencement of operations to December 31 of the year indicated. Please refer to the Year-by-year returns charts in the Past Performance section for commencement date. Initial offering price. Ratios and Supplemental Data INVESTOR SERIES Total Net Asset Value ($000s) 1 424, , ,791 78,001 20,398 N/A Number of Units Outstanding (000s) 1 25,952 13,584 10,594 4,870 1,328 N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Net Asset Value per Unit ($) N/A PREMIUM SERIES Total Net Asset Value ($000s) 1 199, , , ,924 10,662 N/A Number of Units Outstanding (000s) 1 12,242 14,029 19,642 8, N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Net Asset Value per Unit ($) N/A Footnotes for the above table(s) can be found at the end of the Ratios and Supplemental Data section. 6

8 Ratios and Supplemental Data (continued) ADVISOR SERIES Total Net Asset Value ($000s) 1 490, , , ,136 65,438 N/A Number of Units Outstanding (000s) 1 29,918 34,228 42,673 24,218 4,233 N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Net Asset Value per Unit ($) N/A F-SERIES Total Net Asset Value ($000s) 1 523, , , ,696 14,626 N/A Number of Units Outstanding (000s) 1 30,932 19,296 22,656 9, N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Net Asset Value per Unit ($) N/A H-SERIES Total Net Asset Value ($000s) 1 3,572 2,902 3,928 4,053 1,747 N/A Number of Units Outstanding (000s) N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Net Asset Value per Unit ($) N/A K-SERIES Total Net Asset Value ($000s) 1 23,129 26,043 28,146 5,652 N/A N/A Number of Units Outstanding (000s) 1 1,697 1,903 1, N/A N/A Management Expense Ratio (%) N/A N/A Waivers or Absorptions (%) N/A N/A Trading Expense Ratio (%) N/A N/A Portfolio Turnover Rate (%) N/A N/A Net Asset Value per Unit ($) N/A N/A S-SERIES Total Net Asset Value ($000s) 1 45,549 17,242 34,442 25,922 1,014 N/A Number of Units Outstanding (000s) 1 3,221 1,219 2,365 1, N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Net Asset Value per Unit ($) N/A T-SERIES Total Net Asset Value ($000s) 1 39,829 43,092 60,101 36,626 7,966 N/A Number of Units Outstanding (000s) 1 2,900 3,121 4,198 2, N/A Management Expense Ratio (%) N/A Waivers or Absorptions (%) N/A Net Asset Value per Unit ($) N/A Footnotes for the above table(s) can be found at the end of the Ratios and Supplemental Data section. 7

9 Ratios and Supplemental Data (continued) O-SERIES Total Net Asset Value ($000s) 1 3,715 3, N/A N/A Number of Units Outstanding (000s) N/A N/A Management Expense Ratio (%) 2, N/A N/A Waivers or Absorptions (%) N/A N/A Trading Expense Ratio (%) N/A N/A Portfolio Turnover Rate (%) N/A N/A Net Asset Value per Unit ($) N/A N/A 1 This information is provided as at and December 31 of the past five fiscal years, as applicable. 2 Management expense ratio ( MER ) is based on total expenses (excluding distributions, commissions and other portfolio transaction costs) for the stated period, including the Fund s proportionate share of the MER, if any, of the underlying fund(s) in which the Fund has invested, and is expressed as an annualized percentage of daily average NAV during the period. It excludes any operating expenses waived or absorbed by TDAM, which may be discontinued at any time by TDAM at its discretion without notice. 3 The trading expense ratio ( TER ) represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average NAV during the stated period. Where a Fund invests in units of any underlying fund, the TER presented for the Fund includes the portion of TERs, if available, of the underlying fund(s) attributable to this investment. 4 The Fund s portfolio turnover rate ( PTR ) indicates how actively the Fund s portfolio adviser manages its investments. A PTR of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in the course of the stated period. The higher a fund s PTR, the greater the trading costs payable, directly or indirectly, by the fund in the period, and the greater the chance of an investor receiving taxable capital gains in the fiscal year. There is not necessarily a relationship between a high turnover rate and the performance of a fund. 5 The Fund does not pay any management fees or operating expenses with respect to the O-Series units of the Fund, but may have a MER as a result of its holdings in underlying fund(s), representing the weighted average MER of those underlying fund(s) for the reporting period. Less than $500 Less than 500 units Management Fees As manager and trustee of the Fund, TDAM is responsible for the overall business and affairs of the Fund including activities related to making units of the Fund available to investors, and providing, or arranging for the provision of, investment advisory services and marketing services to the Fund. In consideration for the provision of such services, each series of the Fund, other than O-Series units, pays TDAM a management fee. Management fees are calculated and accrued as a percentage of the net asset value of each series of units of the Fund, as of the close of business on each business day for each series and are paid monthly to TDAM. The maximum management fee is the maximum fee that can be charged to each series of units of the Fund according to the simplified prospectus, any portion of which may not be charged at the discretion of TDAM. The actual management fee is the annualized fee that was charged for the Reporting Period. TDAM may charge the maximum management fee without notice to unitholders. Management fees for the Reporting Period, annualized, and a breakdown of the major services rendered for each series, as a percentage of the actual management fees, are as follows: Maximum Actual Dealer Waived (expressed as a %) Mgmt. Fee Mgmt. Fee Compensation Expenses Other Investor Series Premium Series Advisor Series F-Series H-Series K-Series S-Series T-Series O-Series N/A N/A N/A There are no management fees or expenses paid by the Fund in respect of O-Series units of the Fund. Unitholders in the O-Series pay a negotiated administration fee directly to TDAM. Includes management fees paid by the Fund and the proportionate management fees, if any, of the underlying fund(s) in which the Fund has invested. However, there is no duplication of fees for the services provided. Investment advisory, trustee, marketing services and other. The maximum annual management fee rates of certain series of the Fund were changed effective March 28, For the Investor Series, Advisor Series, H-Series and T-Series of the Fund, from January 1, 2017 to March 27, 2017 the maximum annual management fee was 1.50 percent, and from March 28, 2017 to the maximum annual management fee was 1.40 percent. For the F-Series and S-Series of the Fund, from January 1, 2017 to March 27, 2017 the maximum annual management fee was 0.75 percent, and from March 28, 2017 to the maximum annual management fee was 0.65 percent. 8

10 Past Performance The following charts show how the Fund has performed in the past, and can help you understand the risks of investing in the Fund. These returns include the reinvestment of all distributions and would be lower if an investor did not reinvest distributions. They do not include deduction of sales, switch, redemption, or other optional charges (which dealers may charge) or income taxes payable, and these returns would be lower if they did. The Fund s past performance does not necessarily indicate how it will perform in the future. Year-by-year returns The bar charts show how the Fund s performance has varied from year to year for each of the years shown. They show in percentage terms how an investment made on January 1 would have increased or decreased by December 31 for each year and for the six-month period ended. 9

11 Summary of Investment Portfolio as at % of Net Asset Value ASSET ALLOCATION Global Equity Funds 47.8 Canadian Bond Funds 29.9 U.S. Equity Funds 18.4 Cash 4.0 Other Net Assets (Liabilities) (0.1) TOTAL NET ASSET VALUE (000s) $ 1,754,217 as at % of Net Asset Value TOP 25 INVESTMENTS 1. TD Risk Reduction Pool, O-Series TD Canadian Core Plus Bond Fund, O-Series TD U.S. Risk Managed Equity Fund, O-Series TD Global Low Volatility Fund, O-Series TD Income Opportunities Pool, O-Series Cash 4.0 Total % of Net Asset Value represented by these holdings as at % of Net Asset Value INVESTMENT MIX OF UNDERLYING FUND(S) Index Equivalents 40.8 Canadian Bonds 24.3 U.S. Equities 14.9 International Equities 6.2 U.S. Bonds 3.4 Canadian Equities 1.2 Options 1.1 International Bonds 0.2 Mortgage-Backed Securities 0.1 Income Trusts 0.1 Supranationals 0.1 Short-Term Investments 1.0 Cash 5.4 Other Net Assets (Liabilities) 1.2 Note: Totals may not add due to rounding to one decimal place of individual figures. The simplified prospectus and other information about underlying TD investment fund(s) are available on the internet at sedar.com, tdassetmanagement.com or upon request to TD Asset Management Inc. The Summary of Investment Portfolio may change due to ongoing portfolio transactions of the Fund and underlying fund(s). Updates are available quarterly. You may obtain the most current quarterly information by contacting TD Mutual Funds at , by writing to us at TD Asset Management Inc., P.O. Box 100, 66 Wellington Street West, TD Bank Tower, Toronto, Ontario, M5K 1G8, or by to td.mutualfunds@td.com 10

12 Caution regarding forward-looking statements Certain portions of this report, including, but not limited to, Results of Operations and Recent Developments, may contain forward-looking statements including, but not limited to, statements about the Fund, its strategy, risks, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates and similar forward-looking expressions or negative versions thereof. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Fund action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future general economic, political and relevant market factors, such as interest rates, foreign exchange rates, equity and capital markets, and the general business environment, in each case assuming no changes to applicable tax or other laws or government regulation. Expectations and projections about future events are inherently subject to, among other things, risks and uncertainties, some of which may be unforeseeable. Accordingly, assumptions concerning future economic and other factors may prove to be incorrect at a future date. Forward-looking statements are not guarantees of future performance, and actual events could differ materially from those expressed or implied in any forward-looking statements made by the Fund. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and relevant market factors in North America and internationally, interest and foreign exchange rates, equity and capital markets, business competition, technological change, changes in government relations, unexpected judicial or regulatory proceedings and catastrophic events. The above mentioned list of important factors is not exhaustive. You are encouraged to consider these and other factors carefully before making any investment decisions and you are urged to avoid placing any undue reliance on forward-looking statements. Further, there is no specific intention of updating any forward-looking statements contained herein whether as a result of new information, future events or otherwise. For Funds with references to FTSE TMX Canada indices: FTSE TMX Global Debt Capital Markets Inc 2017 FTSE is a trade mark of FTSE International Ltd and is used under licence. TMX is a trade mark of TSX Inc. and is used under licence. All rights in the FTSE TMX Global Debt Capital Markets Inc s indices and/or FTSE TMX Global Debt Capital Markets Inc s ratings vest in FTSE TMX Global Debt Capital Markets Inc and/or its licensors. Neither FTSE TMX Global Debt Capital Markets Inc nor its licensors accept any liability for any errors or omissions in such indices and/or ratings or underlying data. No further distribution of FTSE TMX Global Debt Capital Markets Inc s data is permitted without FTSE TMX Global Debt Capital Markets Inc s express written consent. TD Mutual Funds, TD Pools and the TD Managed Assets Program portfolios are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank and are available through authorized dealers. All trademarks are the property of their respective owners. The TD logo and other trade-marks are the property of The Toronto-Dominion Bank. 11